Archive for February 2011
Where did it all go wrong? India wonders…
By Amit Baruah
Not very long ago, India’s Prime Minister Manmohan Singh could do no wrong – or so it seemed.
Prime Minister Manmohan Singh reshuffled his cabinet on Wednesday, hoping it would restore confidence in his beleaguered government
Long considered a man of unimpeachable integrity, Mr Singh coasted to a second term as the prime minister of the world’s second most populous nation in May last year.
From 145 seats in the lower house of parliament, Lok Sabha, in 2004, his Congress party increased its share of seats to 206 in the May 2009 polls.
By current Indian electoral standards, it was an impressive performance.
With the opposition in disarray, the Congress-led United Progressive Alliance government appeared to be on a roll.
An unshakeable understanding between Mr Singh and Congress President Sonia Gandhi ensured political stability in the country. Frequent meetings between the two suggested a neat division of responsibility between party and government.
‘Mind-boggling’
In the past few months, the personal equation may have continued, but things have begun going horribly wrong for the Congress-led coalition.
Regular protests by Telangana activists are just one of the government’s worries at the moment
Inflation, corruption scandals, a massive and ongoing agitation for a separate state of Telangana in southern India, apparent favours in the allocation of land, the abuse of discretionary powers by state leaders: everything seemed to go wrong at the same time for Mr Singh and his government.
A spate of court cases has given the government a headache.
The Supreme Court made some sharp observations of official decisions in what has come to be known as the 2G scandal – where the government is said to have incurred losses of billions of dollars in the sale of mobile phone spectrum.
And on Wednesday, hearing a case of unaccounted money being held by Indians in foreign banks, the court criticised the coalition for its reluctance to provide more information.
“It is a pure and simple theft of national money,” said Justices B Sudershan Reddy and S S Nijjar. “We are talking about mind-boggling crime. We are not on the niceties of treaties.”
Such comments have become a near-daily affair for the government in one case or the other.
And so far it has not been able to come up with convincing answers.
Government ‘rudderless’
In what the Indian media has dismissed as a lame effort to energise his government, Mr Singh changed the portfolios of as many as 36 ministers on Wednesday, terming it a “minor reshuffle” and promising a more “expansive exercise” in the next few months.
But analysts believe that this may not help the image of the government as a performing entity.
Neena Vyas, associate editor of The Hindu newspaper, told the BBC: “More important is whether the government is able to break the logjam with the opposition, which prevented parliament from conducting any business in the recent session of parliament.”
Ms Vyas was referring to the impasse in parliament, in which all sections of an often-divided opposition came together to demand a parliamentary inquiry into the 2G scandal.
Several officials who chose to remain anonymous told this writer that a sense of paralysis had gripped the government.
“No-one wants to take decisions in such an environment where everything is suddenly under question. The government appears rudderless,” one of them said.
“It’s sad, but this is true,” confirmed a junior minister in Mr Singh’s government, who told me he believed the prime minister had been extremely hurt by the personal allegations levelled against him by some opposition leaders.
Challenges ahead
It is an open question whether the reshuffle carried out by Mr Singh will mean anything in real terms.
There also appear to be divergences on key issues like a new Food Security Bill between the government and the National Advisory Council, a powerful lobby group within the establishment headed by Mrs Gandhi.
Mrs Gandhi has said publicly there should be “no tolerance” for corruption or misconduct.
At a Congress party conference in December, she suggested fast-tracking corruption cases against public servants, providing full transparency in public procurements and contracts, and reviewing the discretionary powers of state chief ministers.
She also called for an open and competitive system of exploiting natural resources.
Analysts are comparing Mr Singh’s second tenure to the political crisis, linked to a corruption scandal, that former Prime Minister Rajiv Gandhi faced back in the mid-1980s, despite having a huge majority in parliament.
Eventually, Mr Gandhi lost the 1989 elections and a motley coalition of parties took power.
While there are similarities between then and now, Mr Singh and Mrs Gandhi still have the opportunity to retrieve lost ground.
A lot will depend on whether or not the government can check spiralling food inflation. Also, whether the Congress and its allies are able to blunt the opposition attack during next month’s budget session of parliament will be critical.
Mr Singh and his government still have a little over three years to go before the May 2014 elections.
But the prime minister, Mrs Gandhi and the government have a tough job ahead if they fancy a return to power in Delhi.
American Held in Pakistan Worked With C.I.A.
WASHINGTON – The American arrested in Pakistan after shooting two men at a crowded traffic stop was part of a covert, C.I.A.-led team collecting intelligence and conducting surveillance on militant groups deep inside the country, according to American government officials.
Raymond A. Davis, center, was escorted to court by a Pakistani security official in Lahore on Jan. 28.
Working from a safe house in the eastern city of Lahore, the detained American contractor, Raymond A. Davis, a retired Special Forces soldier, carried out scouting and other reconnaissance missions as a security officer for the Central Intelligence Agency case officers and technical experts doing the operations, the officials said.
Mr. Davis’s arrest and detention last month, which came after what American officials have described as a botched robbery attempt, have inadvertently pulled back the curtain on a web of covert American operations inside Pakistan, part of a secret war run by the C.I.A.
The episode has exacerbated already frayed relations between the American intelligence agency and its Pakistani counterpart, created a political dilemma for the weak, pro-American Pakistani government, and further threatened the stability of the country, which has the world’s fastest growing nuclear arsenal.
Without describing Mr. Davis’s mission or intelligence affiliation, President Obama last week made a public plea for his release. Meanwhile, there have been a flurry of private phone calls to Pakistan from Leon E. Panetta, the C.I.A. director, and Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, all intended to persuade the Pakistanis to release the secret operative.
Mr. Davis has worked for years as a C.I.A. contractor, including time at Blackwater Worldwide, the private security firm (now called Xe) that Pakistanis have long viewed as symbolizing a culture of American gun-slinging overseas.
The New York Times had agreed to temporarily withhold information about Mr. Davis’s ties to the agency at the request of the Obama administration, which argued that disclosure of his specific job would put his life at risk. Several foreign news organizations have disclosed some aspects of Mr. Davis’s work with the C.I.A.
On Monday, American officials lifted their request to withhold publication. George Little, a C.I.A. spokesman, declined to comment specifically on the Davis matter, but said in a statement: “Our security personnel around the world act in a support role providing security for American officials. They do not conduct foreign intelligence collection or covert operations.”
Since the United States is not at war in Pakistan, the American military is largely restricted from operating in the country. So the Central Intelligence Agency has taken on an expanded role, operating armed drones that kill militants inside the country and running covert operations, sometimes without the knowledge of the Pakistanis.
Several American and Pakistani officials said that the C.I.A. team with which Mr. Davis worked in Lahore was tasked with tracking the movements of various Pakistani militant groups, including Lashkar-e-Taiba, a particularly violent group that Pakistan uses as a proxy force against India but that the United States considers a threat to allied troops in Afghanistan. For the Pakistanis, such spying inside their country is an extremely delicate issue, particularly since Lashkar has longstanding ties to Pakistan’s intelligence service, the Directorate for Inter-Services Intelligence, or ISI.
Still, American and Pakistani officials use Lahore as a base of operations to investigate the militant groups and their madrasas in the surrounding area.
The officials gave various accounts of the makeup of the covert team and of Mr. Davis, who at the time of his arrest was carrying a Glock pistol, a long-range wireless set, a small telescope and a headlamp. An American and a Pakistani official said in interviews that operatives from the Pentagon’s Joint Special Operations Command had been assigned to the group to help with the surveillance missions. Other American officials, however, said that no military personnel were involved with the team.
Special operations troops routinely work with the C.I.A. in Pakistan. Among other things, they helped the agency pinpoint the location of Mullah Abdul Ghani Baradar, the deputy Taliban commander who was arrested in January 2010 in Karachi.
Even before the arrest of Mr. Davis, his C.I.A. affiliation was known to Pakistani authorities, who keep close tabs on the movements of Americans. His visa, presented to the Ministry of Foreign Affairs in late 2009, describes his job as a “regional affairs officer,” a common job description for officials working with the agency.
According to that application, Mr. Davis carried an American diplomatic passport and was listed as “administrative and technical staff,” a category that typically grants diplomatic immunity to its holder.
American officials said that with Pakistan’s government trying to clamp down on the increasing flow of Central Intelligence Agency officers and contractors trying to gain entry to Pakistan, more of these operatives have been granted “cover” as embassy employees and given diplomatic passports.
As Mr. Davis is held in a jail cell in Lahore – the subject of an international dispute at the highest levels – new details are emerging of what happened in a dramatic daytime scene on the streets of central Lahore, a sprawling city, on Jan. 27.
By the American account, Mr. Davis was driving alone in an impoverished area rarely visited by foreigners, and stopped his car at a crowded intersection. Two Pakistani men brandishing weapons hopped off motorcycles and approached. Mr. Davis killed them with the Glock, an act American officials insisted was in self-defense against armed robbers.
But on Sunday, the text of the Lahore Police Department’s crime report was published in English by a prominent daily newspaper, The Daily Times, and it offered a somewhat different account.
It is based in part on the version of events Mr. Davis gave Pakistani authorities, and it seems to raise doubts about his claim that the shootings were in self-defense.
According to that report, Mr. Davis told the police that after shooting the two men, he stepped out of the car to take photographs of one of them, then called the United States Consulate in Lahore for help.
But the report also said that the victims were shot several times in the back, a detail that some Pakistani officials say proves the killings were murder. By this account, Mr. Davis fired at the men through his windshield, then stepped out of the car and continued firing. The report said that Mr. Davis then got back in his car and “managed to escape,” but that the police gave chase and “overpowered” him at a traffic circle a short distance away.
In a bizarre twist that has further infuriated the Pakistanis, a third man was killed when an unmarked Toyota Land Cruiser, racing to Mr. Davis’s rescue, drove the wrong way down a one-way street and ran over a motorcyclist. As the Land Cruiser drove “recklessly” back to the consulate, the report said, items fell out of the vehicle, including 100 bullets, a black mask and a piece of cloth with the American flag.
Pakistani officials have demanded that the Americans in the S.U.V. be turned over to local authorities, but American officials say they have already left the country.
Mr. Davis and the other Americans were heavily armed and carried sophisticated equipment, the report said.
The Pakistani Foreign Office, generally considered to work under the guidance of the ISI, has declined to grant Mr. Davis what it calls the “blanket immunity” from prosecution that diplomats enjoy. In a setback for Washington, the Lahore High Court last week gave the Pakistani government until March 14 to decide on Mr. Davis’s immunity.
The pro-American government led by President Asif Ali Zardari, fearful for its survival in the face of a surge of anti-American sentiment, has resisted strenuous pressure from the Obama administration to release Mr. Davis to the United States. Some militant and religious groups have demanded that Mr. Davis be tried in the Pakistani courts and hanged.
Relations between the two spy agencies were tense even before the episode on the streets of Lahore. In December, the C.I.A.’s top clandestine officer in Pakistan hurriedly left the country after his identity was revealed. Some inside the agency believe that ISI operatives were behind the disclosure – retribution for the head of the ISI, Lt. Gen. Ahmed Shuja Pasha, being named in a New York City lawsuit filed in connection with the 2008 terror attack in Mumbai, in which members of his agency are believed to have played a role. ISI officials denied that was the case.
One senior Pakistani official close to the ISI said Pakistani spies were particularly infuriated over the Davis episode because it was such a public spectacle. Besides the three Pakistanis who were killed, the widow of one of the victims committed suicide by swallowing rat poison.
Moreover, the official said, the case was embarrassing for the ISI for its flagrancy, revealing how much freedom American spies have to roam around the country.
“We all know the spy-versus-spy games, we all know it works in the shadows,” the official said, “but you don’t get caught, and you don’t get caught committing murders.”
Mr. Davis, burly at 36, appears to have arrived in Pakistan in late 2009 or early 2010. American officials said he operated as part of the Central Intelligence Agency’s Global Response Staff in various parts of the country, including Lahore and Peshawar.
Documents released by Pakistan’s Foreign Office showed that Mr. Davis was paid $200,000 a year, including travel expenses and insurance.
He is a native of rural southwest Virginia, described by those who know him as an unlikely figure to be at the center of international intrigue.
He grew up in Big Stone Gap, a small town named after the gap in the mountains where the Powell River emerges.
The youngest of three children, Mr. Davis enlisted in the military after graduating from Powell Valley High School in 1993.
“I guess about any man’s dream is to serve his country,” his sister Michelle Wade said.
Shrugging off the portrait of him as an international spy comfortable with a Glock, Ms. Wade said: “He would always walk away from a fight. That’s just who he is.”
His high school friends remember him as good-natured, athletic, respectful. He was also a protector, they said, the type who stood up for the underdog.
“Friends with everyone, just a salt of the earth person,” said Jennifer Boring, who graduated from high school with Mr. Davis.
Mr. Davis served in the infantry in Europe – including a short tour as a peacekeeper in Macedonia – before joining the Third Special Forces Group in 1998, where he remained until he left the Army in 2003. The Army Special Forces – known as the Green Berets – are an elite group trained in weapons and foreign languages and cultures.
It is unclear when Mr. Davis began working for the C.I.A., but American officials said that in recent years he worked for the spy agency as a Blackwater contractor and later founded his own small company, Hyperion Protective Services.
Mr. Davis and his wife have moved frequently, living in Las Vegas, Arizona and Colorado.
One neighbor in Colorado, Gary Sollee, said that Mr. Davis described himself as “former military,” adding that “he’d have to leave the country for work pretty often, and when he’s gone, he’s gone for an extended period of time.”
Mr. Davis’s sister, Ms. Wade, said she was awaiting her brother’s safe return.
“The only thing I’m going to say is I love my brother,” she said. “I love my brother, God knows, I love him. I’m just praying for him.”
US ‘begins talks’ with the Taliban
A report claims that the Obama administration has launched exploratory contacts with senior leaders of the Afghan insurgency
The Afghan conflict has not lacked peace initiatives in the past few years. There have been at least a dozen back-channel contacts with the Taliban brokered by a mix of governments, institutions or individuals. But until now, it has been a cottage industry, producing reports but no tangible gains.
The talks are said to be the legacy of the late US envoy, Richard Holbrooke.
Many of those involved in these encounters predicted that there would be no way of knowing whether the Taliban leadership was interested in making a deal until Washington decided to engage with it directly. That now appears to have happened.
A report by Steve Coll in the current edition of the New Yorker reports that:
The Obama Administration has entered into direct, secret talks with senior Afghan Taliban leaders, several people briefed about the talks told me last week. The discussions are continuing; they are of an exploratory nature and do not yet amount to a peace negotiation.
There are few details. We do not learn which Taliban figures are taking part, though Mullah Omar is apparently not involved. Nor is it clear whether the contacts are being orchestrated on the US side by the state department or the White House. Coll gives credit for inspiring them to Richard Holbrooke, the US envoy to Afghanistan and Pakistan who died in December.
According to European diplomats, Barack Obama has told his national security staff that 2011 should be the year in which the political track towards a resolution takes precedence over the military approach. The US-Taliban contacts, if confirmed, signal that Washington is no longer content to leave the pace of political progress to the Afghan government that has little incentive in a settlement that would almost certainly put it out of business.
The next step will be a meeting of the international contact group early next month in Jeddah, where the special envoys (including Holbrooke’s replacement, Marc Grossman) will be hosted by the Organisation of the Islamic Conference.
Such meetings are generally too large and unwieldy to yield concrete results, but the OIC’s role this time will be widely seen as a blessing from the Islamic world for the search for a negotiated solution, important in turn for drawing in major Taliban figures. Holbrooke is said to have seen the OIC’s agreement to play host as a major coup and had been excitedly briefing Hillary Clinton on the development when he was taken ill.
The other big hope is that now there is news of direct US-Taliban talks, other regional players, Pakistan and Iran in particular, will play a more engaged role in multilateral talks, for fear of being left behind by a ‘peace train’ that might finally be leaving the station.
India’s Orissa state ‘halts’ offensive against Maoists
The government in the eastern Indian state of Orissa has halted an offensive against Maoist rebels after they abducted a senior official.
Mr Krishna was on his way to inspect a government project when he was seized
R Vineel Krishna, district collector of Malkangiri, and another official were kidnapped on Wednesday evening.
The Maoists have demanded the release of rebels held in prisons and an end to the offensive by security forces.
Indian forces are battling Maoists in several states. The rebels say they are fighting for the rights of the poor.
Orissa’s Home Secretary UN Behura said the government was “stopping all combing operations in the state” and was ready to talk to the rebels.
Reports said the state government had contacted leading social worker Swami Agnivesh to negotiate with the rebels to secure Mr Krishna’s release.
The Maoists’ 48-hour deadline to the government to release rebels held in prison expires on Friday evening.
Correspondents say the deadline is likely to be extended in view of the government’s efforts to talk to the rebels.
Malkangiri is among the districts worst affected by Maoist violence in India.
The hilly and forested terrain make it an ideal place for Maoists to run their camps there and launch operations against security forces.
Mr Krishna, 30, is a graduate from the premier Indian Institute of Technology and joined the civil service in 2005. He was appointed to head Malkangiri district 16 months ago.
Prime Minister Manmohan Singh has described the Maoist insurgency as India’s biggest internal security challenge.
A government offensive against the rebels – widely referred to as Operation Green Hunt – began in October 2009.
It involves 50,000 troops and is taking place across five states – West Bengal, Jharkhand, Bihar, Orissa and Chhattisgarh.
Indian PM vows to punish corrupt officials
NEW DELHI: India’s embattled prime minister defended his government Wednesday against a string of corruption scandals, saying that he took the allegations seriously and would punish anyone involved, no matter their position.
India’s Prime Minister Manmohan Singh
Prime Minister Manmohan Singh’s government has been wracked by allegations that Cabinet ministers and ruling party officials orchestrated shady deals over the sale of cellular phone licenses, presided over faulty preparations for the Commonwealth Games and were involved in other alleged scams that cost the government billions of dollars.
The scandals have dominated politics in India for months. The entire winter session of parliament was paralysed by the opposition amid demands for the establishment of an independent investigative body, which Singh refused.
Singh told reporters during a news conference Wednesday that the guilty would be punished.
“I wish to assure you, and I wish to assure the country as a whole that our government is dead serious in bringing to book all the wrongdoers, regardless of the positions they may occupy,” he said.
He denied any personal connection to the scandals, and expressed concerns that the nation’s image was being badly tarnished.
“We are weakening the self confidence of the people of India. I don’t think that is in the interest of anybody that is in our country. We have a functioning government…we take our job very seriously. We are here to govern and govern effectively,” he said, mildly chiding reporters for focusing so heavily on the scams.
“India as a whole has to march forward,” he said.
Rajasthan cops arrest witness in Mecca Masjid case
The Times of India
HYDERABAD: A prosecution witness in the Mecca Masjid bomb blast case, Bharat Mohanlal Rateshwar, 43, was arrested recently by the Rajasthan Anti-Terrorism Squad (RATS) on charges of his role in the Ajmer Dargah bombing.
According to sources, the Central Bureau of Investigation (CBI) had picked up Rateshwar in connection with the Mecca Masjid case a few months ago and grilled him. In view of his knowledge of the vital portions of the case, the CBI offered to make him a prosecution witness to which he had agreed. Soon after, the CBI arrested the key terror plotter Swami Aseemanand from near Haridwar in the same case and brought him to the city.
Fearing that the Swami might spill the beans and name him in other bombing cases, Rateshwar took to his heels and disappeared from the police radar. His fears came true when the Swami spoke about his role in Ajmer Dargah bomb blast case to the RATS.
In the meantime, the RATS also gathered more evidence against Rateshwar on its own in the Dargah case and intensified the manhunt. He was finally arrested last week and produced in Ajmer district court.
Sources said that the CBI has cited Rateshwar as the PW 113 in the Calendar of Oral Evidence and also recorded his statement. The CBI chargesheet filed against the two accused __ Devender Gupta and Lokesh Sharma __ in the Mecca Masjid case said that Rateshwar has given a statement to the agency, which corroborates the facts of the chargesheet and would prove that on October 11, 2007 Sunil Joshi (another accused in the case who was murdered later) phoned and told him that the Ajmer blast was triggered by him with the knowledge of Indresh Kumar, a senior RSS leader.
The chargesheet further said that Rateshwar would also prove that Swami Aseemanand and Sunil Joshi were close to each other and that the Swami had provided shelter to Joshi after the Ajmer blast.
Sources said that the RATS could also make Rateshwar a witness as he has been involved with the gang that carried out bombings at various places in the country during last about six years.
Betrayal of a mandate?
Tehelka
THE BURNING question that the Justice Somasekhara Commission was mandated to answer was “to identify persons and organisations” responsible for the attacks on churches in September 2008 and thereafter in Karnataka. On the question of who was behind the attacks, the report says “there is no basis to the apprehension of the Christian petitioners that politicians, Sangh Parivar, BJP and the state government are involved in the attacks, either directly or indirectly”.
However, the report also observes, “The plea of Christian memorialists for taking action against Mahendra Kumar, the then convenor of Bajrang Dal, who publicly sought to justify the attacks, is totally justified.” The report adds, “the plea that organisations like Bajrang Dal need identification and registration for legal control deserves acceptance”.
Further, Annexure XLVIII of the report, which lists 56 churches that were attacked, specifically names Hindutva fundamentalist organisations that were involved. In particular, Bajrang Dal has been named as being behind the attacks on nine churches, Hindu Jagran Vedike (HJV) on three churches, Sangh Parivar on one church and unnamed Hindu fundamentalists on two churches.
In view of the annexure, the question is whether Justice Somasekhara is justified in giving a clean chit to the Parivar. The only way he can do that is by concluding that neither the Bajrang Dal nor the HJV are part of the Parivar. However, the material before the commission, both in terms of written submissions made before it as well as the cross-examination of Mahendra Kumar, indicates the linkages between the Bajrang Dal, VHP and RSS. What emerges is that the Bajrang Dal does not act independently but is part of a larger Parivar that controls and directs its actions. During cross-examination, Mahendra Kumar states that the Bajrang Dal is the youth wing of the VHP.
This admission must be read in the context of the Liberhan report, which was also placed before the commission. It should be noted that when the Liberhan report was sought to be placed by the counsel for the Christian community, Justice Somasekhara objected, saying that the report was unnecessary as he was going to understand what happened in Karnataka as a sui generis event with no linkages or connections to past events. However, the counsel argued that one cannot see the attacks as a one-off event and it had to be seen as linked to Hindutva ideology and the RSS’ organisational structure.
The Liberhan report had concluded that the Parivar included the BJP, RSS, Bajrang Dal, VHP and many other “mutating and transforming organisations”. It argued that they are “collectively an immense and awesome entity with a shrewd brain, a wide encompassing sweep and the crushing strength of the mob”.
The material before the commission discloses the Parivar’s role in the attacks. Why then does Justice Somasekhara conclude that the Parivar had no role? What paralysed him from drawing the necessary conclusions?
Justice Somasekhara concedes that district officials failed, particularly in Davangere. Describing their actions as “unreasonably cruel and illegal,” he recommended initiation of action against police officers. However, the commission refuses to attribute any vicarious liability to the BJP-run state government.
As an exercise in public reasoning, Justice Somasekhara’s findings are riddled with inconsistencies and contradictions, and completely fails to persuade that indeed the Sangh Parivar had nothing to do with the church attacks or that the BJP administration is not criminally liable for allowing the attacks to happen.
Indian Black Money: The Swindler’s List
Tehelka
It is almost two years since the German Government had passed on the names and bank account details of eighteen Indians who had stashed their alleged ill-gotten wealth in the LGT bank of Liechtenstein, a well-known tax haven nation, 190 km from Munich, Germany.
Germany had officially handed over the list to the Indian Government on 18 March 2009. Prime Minister Manmohan Singh and Union Finance Minister Pranab Mukherjee have since said more than once that this list cannot be disclosed to the Indian people. Opposition parties like the BJP and the Left Front have repeatedly said the names must be disclosed. The BJP has been accusing the government of shielding the names of the tax evaders and not doing enough to bring back the crores of rupees stashed away in tax havens.
Thus, the list has become a subject of tremendous controversy and suspense.
TEHELKA has accessed 16 of the 18 names, of which we are putting out 15 right now. These names include individuals as well as trusts. At this point, we are putting out 15 names without disclosing details like their addresses, the businesses they are involved in and the total money they have stored away in Liechtenstein. Abiding by the basic journalistic principle of proving the accused an opportunity to present their side of story, TEHELKA has approached each of these individuals involved and is awaiting their response.
Once these individuals respond, we shall share the full details of who these people are and what they do. We shall also put out their responses. This, then, is the list.
1. Manoj Dhupelia
2. Rupal Dhupelia
3. Mohan Dhupelia
4. Hasmukh Gandhi
5. Chintan Gandhi
6. Dilip Mehta
7. Arun Mehta
8. Arun Kochar
9. Gunwanti Mehta
10. Rajnikant Mehta
11. Prabodh Mehta
12. Ashok Jaipuria
13. Raj Foundation
14. Urvashi Foundation
15. Ambrunova Trust
The three trusts in this list are registered outside India.
The government has been claiming so far that a detailed investigation into all the bank account details provided by Germany is underway and making the names public would violate the agreement between two sovereign countries, India and Germany.
According to highly placed sources, the investigation into the 15 names that TEHELKA is disclosing, is close to completion and the Central Board of Direct taxes would soon prosecute these trusts and individuals under the relevant provisions of the Income tax Act.
The sources told TEHELKA that the two main charges proved against these individuals are of tax evasion and concealment of income.
The authorities also believe that some of these account holders could be fronts for high profile individuals. One name in particular is being investigated for suspected links with a well-known Indian politician.
The name of the chairman of a major Indian corporation is also part of the list, but TEHELKA is holding back his name until we have his full version.
According to Pranab Mukherjee, the German Government has provided the information under the strict confidentiality clauses of the Double Taxation Avoidance Agreement, and hence they could not be disclosed at the stage of investigation.
However, once the government launches prosecutions, the name would be made public, he had said.
These 18 names are part of the list of 1,400 clients, which were stolen from the databank of LGT Group, the Liechtenstein bank owned by the principality’s ruling family, and passed on to German tax authorities in 2008.
The German government had paid as much as €5 million, or $7.4 million, for information on German account holders in Liechtenstein on a disk provided by an informant to the German Federal Intelligence Service, or BND.
After this, Germany and England had launched massive investigations into the suspected tax evasions and have since prosecuted dozens of their citizens on charges of tax evasion and concealment of income.
The German Government alone had initiated action against over 600 of its tax payers.
Besides taking action against its own citizens, the German Government had also shared this information with other countries including India.
But the Indian names figuring in LGT Bank list are only a tip of the iceberg. Experts estimate that Rs 65 lakh crores of ill-gotten wealth earned by Indians is stored in Swiss banks alone.
Prime Minister Manmohan Singh: “Investigations are on”
According to R Vaidyanathan, Professor of Finance at the Indian Institute of Management, Bengaluru, the average amount stashed away by Indians in offshore tax havens between 2002 and 2006 was $136.5 billion. “These illegal funds lying in tax havens are not just related to the issue of tax evasion. It is capital flight from India and part of a corrupt nexus between politicians, bureaucrats and corporate companies,” says Vaidyanathan.
Different Indian governments over the past 20 years have done little to bring this money back by making necessary changes in existing Indian taxation and foreign exchange management laws.
Besides, the government has been slow in renegotiating double taxation avoidance treaties with different tax havens and making provisions for clauses under which the governments and banks could be compelled to disclose the account details.
For instance, under the existing Indo-Swiss Double Taxation Avoidance Agreement (DTAA), information on the Swiss bank deposits of Indian residents could not to be revealed until the Indian Government furnishes evidence of criminality behind these banking transactions.
India enters into DTAAs with other countries to encourage flow of foreign capital and technology, and also to check tax evasion. The purpose of a DTAA is to mitigate the hardship caused by dual taxation on the same source of income. Double taxation on a single source earned by an individual is possible under income tax, as taxation depends not on citizenship, but on residential status.
Pranab Mukherjee: “We can’t reveal the names”
To date, India has signed comprehensive double taxation avoidance agreements with 77 countries.
“I have asked the revenue department to reopen negotiations for all 77 double tax avoidance agreements with all countries that we have entered into so far, so that we can have real time exchange of information on tax evasion and tax avoidance,” Mukherjee had said at the India Economic Summit in November 2009.
Since the recession hit the economies of developed countries, the Organisation for Economic Cooperation and Development (OECD) has been leading a campaign for transparency in the international banking system, and making the tax havens to necessarily exchange information with other countries where tax evasions are involved.
The US in particular has been proactive in using the might of its economy to make different tax havens fall in line, and share the names of US citizens who have deposited money in these tax havens.
For instance, the UBS Bank, a Swiss bank and the world’s largest wealth management company, came under US scrutiny in June 2008 to uncover the identity of US nationals who maintained secret accounts in the bank and were defrauding the American revenue department.
When the US Government threatened to prosecute the USB Bank, the bank paid a fine of $780 million and also agreed to reveal the details of the hidden assets of US nationals within a fixed time frame failing which it would face prosecution.